Australia: Copyright vs freedom of the Internet: Round 1 just passed the European Parliament

At the end of last month, the European Union Parliament adopted a controversial new " Directive on Copyright in the Digital Single Market" (Directive).

One of the stated aims of the Directive is to give copyright holders such as musicians, artists, performers and authors greater bargaining power against tech giants like Google, YouTube and Facebook in the modern age of online content creation and distribution. However, as the widespread and vocal outcry against the Directive has demonstrated, other internet users remain concerned about its potential implications for freedom of information and censorship online.

In this article, we explore some of the more controversial aspects of the Directive, including:

  • the shifting of liability from users onto online platforms to compensate rights holders fairly for the use of their works; and
  • the introduction of the so-called "link tax", which provides ancillary copyright to press publishers for the use of snippets of articles on news aggregator sites.

We also consider the potential implications for various stakeholders in the EU and beyond.

Shifting liability to distribution platforms

Article 17 (previously Article 13) of the Directive makes online content-sharing platforms such as YouTube and Facebook legally liable for content uploaded by their users. This means that creators whose copyright is infringed by works uploaded to these platforms now have a legal remedy against the platforms for unpaid licence fees, providing greater incentive for platforms to take copyright infringement seriously and implement strategies to avoid it.

There is nothing in the Directive that specifically requires these platforms to implement automatic screening mechanisms to check for copyrighted material prior to upload. However, critics fear that this will be a necessary consequence of the shift in liability onto the platforms. Given the sheer quantity of material uploaded to these sites on a daily basis, it would be impossible for the platforms to perform manual checks of uploaded material in practice. This means that automatic filtering of content may be the only way for the platforms to ensure compliance, or at least reduce their risks of significant financial exposure.

Critics also fear that, if implemented, such filters would not be sophisticated enough to distinguish properly between infringing material and legitimate content (including content that is specifically excluded from the scope of the Directive), leading to unintended internet censorship. For example, the Directive contains specific provisions allowing for the free sharing of works for the purposes of quotation, criticism, review, caricature, parody or pastiche. These carve-outs were added to quell fears that the Directive would prevent users from uploading and sharing popular content like memes and GIFs. However, it is not clear how automated filtering processes would be able to determine the intended 'purpose' of a work, and therefore whether or not it falls within a relevant exception.

The adoption of the Directive should be welcome news for rights holders who have, to date, been in a relatively weak bargaining position when seeking remuneration for the use of their works online. The limited recourse available to rights holders against platforms onto which their content was uploaded without compensation has meant that platforms have little incentive to actively discourage such behaviour from users.

On the flipside, content distribution platforms will need to begin thinking immediately about how best to ensure that they comply with the new requirements of the Directive, whether by introducing automatic filtering or otherwise.

Australian lawmakers, platforms and copyright holders will also be watching the effects of Article 17 with interest in the coming years, as the state of Australian law with respect to the copyright liabilities is currently the subject of litigation which has the potential to make platforms liable for infringing content uploaded by users, both as direct infringers and also for "authorising" the infringing conduct of their users. We report here on two recent decisions in this area, and whether they are likely to align Australian copyright law more closely with the EU under Article 17.

The "link tax": providing ancillary copyright for press publishers

Article 15 (previously Article 11) of the Directive, which has been dubbed the "link tax", allows press publishers to require news aggregators like Google News to pay licensing fees for reproducing snippets of text from news articles.

There is a specific exception in the Directive for "individual words or very short extracts" and also (despite the "link tax" moniker) for hyperlinks. However, it is not clear what length will be considered "very short" and thereby excluded from the requirement, or how the requirement will work in practice (if indeed it will work at all).

It is worth noting that both Germany (in 2013) and Spain (in 2014) previously attempted to introduce similar legislation at a national level. In both countries, the attempts are widely considered to have been ultimately unsuccessful.

  • In Germany, while the law is still in place, it has been largely ineffective, with many publishers simply providing free licences to news aggregators to allow them to continue to aggregating and linking to their content without charge.
  • The Spanish legislation went a step further, denying publishers the choice to opt out of the tax by providing a free licence. In response, Google News simply shut down its services in Spain, which led to many Spanish news sites losing significant online traffic.

Critics of Article 15 fear that it will mean the end of news aggregator services altogether (as was the case for Google News in Spain). However, as the example of Germany shows, if press publishers consider that it is ultimately in their best interests to have their content displayed and linked on news aggregator sites, they may choose to provide a free licence, essentially avoiding the consequences of the new payment scheme altogether.

What does this mean for me?

The Q&A webpage on the Directive is quick to emphasise that ordinary users are not the target of the Directive and are unlikely to be affected by its implementation. Rather, the Directive is aimed at ensuring that original content creators and press publishers are properly and fairly compensated for the use of their material, and it is these stakeholders that are likely to feel the effects of the changes most fully, as outlined above.

However, the practical effects of the Directive will not be known until it becomes clear exactly how the EU member states intend to implement its contents over the next two years. The resulting binding legislation will look slightly different in each jurisdiction which, given the borderless nature of the Internet, will add an additional layer of complexity for companies as they attempt to realign their online activities to comply with the new requirements.

Although the requirements of the Directive will, of course, only apply within the EU, internet users in other jurisdictions may also feel its effects. As occurred when the EU introduced its sweeping data protection regulations last year, it is expected that some companies, which operate both inside and outside the EU, will choose to introduce global measures to ensure compliance.

All this means that your memes and GIFs are safe for now, but it remains to be seen whether they will one day be automatically filtered out of the EU altogether, a consequence of which the UK, at least, will be safe.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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